OWING to increasing taxes of cigarettes, big tobacco company British American Tobacco (BAT) is shutting down one of its major factory operations in Malaysia.
The move is part of the company’s restructuring exercise which involved the retrenchment of over 200 workers at its factory in Petaling Jaya, near Kuala Lumpur. Products for local consumption be imported from other regional plants.
The government had recently increased the excise duty on cigarettes spiking prices from RM13.80 (US$3.30) to RM18 (US$4.40) per packet of 20.
This was part of the government’s effort to end the habits of an estimated 4.7 million smokers.
Sign of deteriorating economy..😅 https://t.co/bCJfEA4WLe
— HLIM (@halimk) March 18, 2016
British American Tobacco will be closing down it's factory in Malaysia. Well all the best, smokers
— Syaiffrie (@Syaiffrie) March 17, 2016
BAT produces brands such as Benson & Hedges, Dunhill, Lucky Strike, Pall Mall, Kent, and Rothmans.
Apart from the increased taxes, the company also blamed the increased presence of smuggled cigarettes as a reason for the winding up of the factory.
Earlier this week, the health ministry announced plans to impose a blanket ban on smoking in all hotels in the country by the end of the year as part of an immense effort to end the habits of over 130,000 cigarette users in the country annually.
All hotels will be gazetted as smoke-free areas by end of the year, while other public places will gradually be made out-of-bounds for smoking.